RAC ‘Em Up: CMS Continues New Audit Program Outreach

RAC ‘Em Up: CMS Continues New Audit Program
Outreach

SAN FRANCISCO — With its Recovery Audit
Contractors going live in some states in March, CMS continues
area outreach on the new audit program this week with three
sessions at its San Francisco regional office. In-person sessions
are also set for Texas this month.

The agency has planned a gradual rollout of the new audit
program to all 50 states by 2010. When fully implemented, the RACs
— in territories matching the DME MAC jurisdictions —
will each be responsible for identifying overpayments and
underpayments from previous claims in approximately a quarter of
the country.

Under the program, the RACs will be paid a contingency fee based
on the amount of improper payments they find and collect. In a
final RFP posted on the CMS Web site, contingency fees for the RAC
contracts are listed at: Region A, 12.45 percent; Region B, 12.5
percent; Region C, 9 percent; and Region D, 9.49 percent.

According to a CMS representative on a Special Open Door
conference call last month, with the high volume of claims Medicare
receives — about 4.5 million each workday — those
claims “can’t possibly receive the type of scrutiny needed to
prevent improper payment, so we have the RAC as another tool to try
to fix this problem.”

On the call, officials confirmed the RAC look-back period has
been limited to three years, with a beginning maximum look-back
date of Oct. 1, 2007. The RACs will perform two types of reviews:
automated, meaning they can make a decision without requesting a
medical record; and complex, for which they will request medical
records in order to make a decision.

For DME providers, the number of medical records the RACs can
request is limited to

1 percent of the average monthly Medicare services per NPI per
45 days, with a maximum of 200 during that period. The RACs aren’t
set up to receive electronic data interchange, so medical records
must be submitted by mail, fax or CD/DVD. The provider has 45 days,
plus a five-day mailing window, to submit the medical records.

CMS will have a new issue review board to provide oversight of
RAC activities, and a RAC validation contractor will pull a sample
of RAC claims to check their accuracy. An annual accuracy score for
each RAC will be made public.

In one of the biggest changes from the
RAC demonstration, a CMS official said, “One of the things we
think is going to help the most to ensure accuracy is, if a RAC
loses at any level of appeal, the RAC must return the contingency
fee … That’s a great incentive for the RACs to double check
their work.”

Agency officials have said they are encouraging the contractors
to be reasonable in their dealings with providers and want to make
sure the program is “fair.” But according to Walt Gorski, vice
president of government affairs for the American Association for
Homecare, the program could have a “devastating impact on home care
providers because we will be held responsible for what is in the
medical record.”

Check the CMS’s Recovery Audit Contractors Web page for the RAC
expansion schedule and an FAQ.